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Gambling Stock Roundup: Focus on Q3 Earnings, Nevada Revenues Rise in September
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The gambling industry’s focus has been on the third-quarter 2016 financial releases in the past week.
Both Penn National Gaming Inc. (PENN - Free Report) and Churchill Downs Inc. (CHDN - Free Report) posted mixed results. Though Penn National Gaming’s earnings beat the Zacks Consensus Estimate, revenues missed the mark. Meanwhile, Churchill Downs failed to beat bottom-line expectations while its top line surpassed the same.
Meanwhile, Monarch Casino & Resort Inc. (MCRI - Free Report) posted better-than-expected results with earnings and revenues beating the Zacks Consensus Estimate.
On the other hand, after registering a decline in revenues last month, Nevada revenues went up in the month of September.
1. Penn National Gaming posted third-quarter 2016 earnings of 51 cents, which topped the Zacks Consensus Estimate of 27 cents by 88.9%. Meanwhile, earnings witnessed a significant rise on a year-over-year basis on the back of higher revenues. Also, earnings were better than management’s expectation.
Net revenue of $765.6 million increased 3.6% year over year due to a rise in revenues at South/West, Midwest and Other segments, partially offset by a decline in the Northeast segment. However, this Zacks Rank #3 (Hold) company missed the consensus mark by a mere 0.4% and also fell slightly short of the management’s guidance.
2. Monarch Casino & Resort’s third-quarter earnings of 45 cents per share beat the Zacks Consensus Estimate of 39 cents by 15.4% Also, earnings increased 21.6% year over year on the back of higher revenues.
Net revenue of $57.1 million surpassed the consensus mark by over 2%. Moreover, revenues rose 6.6% year over year reflecting solid growth at both Atlantis and Monarch Casino Black Hawk casinos. This Zacks Rank #1 (Strong Buy) company also witnessed an increase in food and beverage, hotel and other revenues. You can see the complete list of today’s Zacks #1 Rank stocks here.
3. Churchill Downs third-quarter earnings per share of 52 cents lagged the Zacks Consensus Estimate of 89 cents by 41.6%. However, earnings increased 30% year over year on an increase in revenues. Net revenue of $303 million beat the consensus mark by 0.3% and also increased 8.4% year over year.
The upside reflects additional revenues from Big Fish Games, which the company acquired in Dec 2014, as well as growth in revenues from Casinos, and TwinSpires segments. Churchill Downs presently has a Zacks Rank #3.
4. According to the Nevada Gaming Control Board, Nevada gambling revenues inched up 3.6% in Sep 2016 from the year-ago period to nearly $949 million. The rise brings Nevada revenues back on track after a drop in August. Notably, Nevada had witnessed solid performance in June and July as well.
More specifically, casino revenues in the Las Vegas Strip – which accounts for more than half of Nevada’s total revenue – were up 7.5% year over year in the month. Meanwhile, Reno recorded a 1.7% rise in casino revenues.
Price Performance
The following table shows the price movement of the major gambling stocks over the past week and the last six months:
Company
Last Week
Last 6 Months
WYNN
-2.7%
6.7%
LVS
-0.3%
27.9%
MGM
-0.8%
22.4%
MPEL
1.2%
14.2%
MCRI
-2.7
23.4%
CACQ
-4.1%
55.9%
BYD
-4.5%
-3.5%
Over the last five trading sessions, share price movement of the major gambling stocks was predominantly negative. Boyd Gaming Corporation (BYD - Free Report) and Caesars Acquisition Company lost the maximum at 4.5% and 4.1%, respectively. Meanwhile, Melco Crown Entertainment Limited was the sole gainer at 1.2%.
However, over the last six months, the price performance of the gambling stocks was mostly positive. Among the stocks that appreciated the most were Caesars Acquisition and Las Vegas Sands Corp. (LVS - Free Report) , rallying nearly 55.9% and 27.9%, respectively.
What’s Next in the Gambling Space?
We note that gambling stocks have seen both gains and losses in the recent sessions and with the earnings season well under way, investors can expect this volatility to continue.
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Gambling Stock Roundup: Focus on Q3 Earnings, Nevada Revenues Rise in September
The gambling industry’s focus has been on the third-quarter 2016 financial releases in the past week.
Both Penn National Gaming Inc. (PENN - Free Report) and Churchill Downs Inc. (CHDN - Free Report) posted mixed results. Though Penn National Gaming’s earnings beat the Zacks Consensus Estimate, revenues missed the mark. Meanwhile, Churchill Downs failed to beat bottom-line expectations while its top line surpassed the same.
Meanwhile, Monarch Casino & Resort Inc. (MCRI - Free Report) posted better-than-expected results with earnings and revenues beating the Zacks Consensus Estimate.
On the other hand, after registering a decline in revenues last month, Nevada revenues went up in the month of September.
Gaming Industry Price Index
Gaming Industry Price Index
Recap of the Week’s Most Important Stories
1. Penn National Gaming posted third-quarter 2016 earnings of 51 cents, which topped the Zacks Consensus Estimate of 27 cents by 88.9%. Meanwhile, earnings witnessed a significant rise on a year-over-year basis on the back of higher revenues. Also, earnings were better than management’s expectation.
Net revenue of $765.6 million increased 3.6% year over year due to a rise in revenues at South/West, Midwest and Other segments, partially offset by a decline in the Northeast segment. However, this Zacks Rank #3 (Hold) company missed the consensus mark by a mere 0.4% and also fell slightly short of the management’s guidance.
2. Monarch Casino & Resort’s third-quarter earnings of 45 cents per share beat the Zacks Consensus Estimate of 39 cents by 15.4% Also, earnings increased 21.6% year over year on the back of higher revenues.
Net revenue of $57.1 million surpassed the consensus mark by over 2%. Moreover, revenues rose 6.6% year over year reflecting solid growth at both Atlantis and Monarch Casino Black Hawk casinos. This Zacks Rank #1 (Strong Buy) company also witnessed an increase in food and beverage, hotel and other revenues. You can see the complete list of today’s Zacks #1 Rank stocks here.
3. Churchill Downs third-quarter earnings per share of 52 cents lagged the Zacks Consensus Estimate of 89 cents by 41.6%. However, earnings increased 30% year over year on an increase in revenues. Net revenue of $303 million beat the consensus mark by 0.3% and also increased 8.4% year over year.
The upside reflects additional revenues from Big Fish Games, which the company acquired in Dec 2014, as well as growth in revenues from Casinos, and TwinSpires segments. Churchill Downs presently has a Zacks Rank #3.
4. According to the Nevada Gaming Control Board, Nevada gambling revenues inched up 3.6% in Sep 2016 from the year-ago period to nearly $949 million. The rise brings Nevada revenues back on track after a drop in August. Notably, Nevada had witnessed solid performance in June and July as well.
More specifically, casino revenues in the Las Vegas Strip – which accounts for more than half of Nevada’s total revenue – were up 7.5% year over year in the month. Meanwhile, Reno recorded a 1.7% rise in casino revenues.
Price Performance
The following table shows the price movement of the major gambling stocks over the past week and the last six months:
Company
Last Week
Last 6 Months
WYNN
-2.7%
6.7%
LVS
-0.3%
27.9%
MGM
-0.8%
22.4%
MPEL
1.2%
14.2%
MCRI
-2.7
23.4%
CACQ
-4.1%
55.9%
BYD
-4.5%
-3.5%
Over the last five trading sessions, share price movement of the major gambling stocks was predominantly negative. Boyd Gaming Corporation (BYD - Free Report) and Caesars Acquisition Company lost the maximum at 4.5% and 4.1%, respectively. Meanwhile, Melco Crown Entertainment Limited was the sole gainer at 1.2%.
However, over the last six months, the price performance of the gambling stocks was mostly positive. Among the stocks that appreciated the most were Caesars Acquisition and Las Vegas Sands Corp. (LVS - Free Report) , rallying nearly 55.9% and 27.9%, respectively.
What’s Next in the Gambling Space?
We note that gambling stocks have seen both gains and losses in the recent sessions and with the earnings season well under way, investors can expect this volatility to continue.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>